Answer:
free rider problem
Explanation:
The air pollution constitutes a negative externality
A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation. Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.
Government can regulate the amount of externality produced by placing an upper limit on the amount of negative externality permissible
Free rider is when some people benefit from the solution proffered but do not pay to enjoy these benefits
Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. Use the formula method to determine how many cups of coffee would have to be sold to attain target profits of $3,000 per month.
Answer:
See below
Explanation:
The formula method is denoted by
Unit sales to attain the targeted profit =( Target profit + Fixed expenses) / Contribution margin per unit
Target profit = $3,000 per month
Fixed expenses = $1,300
Contribution margin per unit = $1.49 - $0.36 = $1.13
Therefore, unit sales to attain targeted profit = ($3,000 + $1,300) / $1.13 = 3,805.31 units
It means that 3,805.31 cup of coffee would have to be sold to attain target profit of $3,000 per month.
Why is it difficult to maintain relations with multiple stakeholders?
A. Because different stakeholders may have conflicting goals.
B. Because not all stakeholder needs are well known.
C. Because stakeholders want to harm the organization.
D. Stakeholders don't understand the organization's goals.
Answer:
A
Explanation:
Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.24. The average fixed expense per month is $1,600. An average of 2,100 cups are sold each month. What is the CM Ratio for Coffee Klatch?
Answer:
The contribution margin ratio for Coffee Klatch is 83%.
Explanation:
Given that Coffee Klatch is an espresso stand in a downtown office building, and the average selling price of a cup of coffee is $ 1.49 and the average variable expense per cup is $ 0.24, and the average fixed expense per month is $ 1,600, to determine what is the CM Ratio for Coffee Klatch if an average of 2,100 cups are sold each month, the following calculation must be performed:
Contribution margin ratio: (sales - variable costs) / sales
((2,100 x 1.49) - (2,100 x 0.24)) / (2,100 x 1.49) = X
(3.129 - 504) / 3.129 = X
2.625 / 3.129 = X
0.83 = X
Thus, the contribution margin ratio for Coffee Klatch is 83%.
The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 5,000 per day. FSF supplies hot dogs to local restaurants at a steady rate of 250 per day. The cost to prepare the equipment for producing hot dogs is $66. Annual holding costs are 45 cents per hot dog. The factory operates 300 days a year. Find
Answer: See explanation
Explanation:
The remainder of the question:
a). The optimal run size
b) The number of runs per year
c) The length (in days) of a run.
From the question,
p = 5000
u = 250 hotdogs per day
D = 250 × 300 = 75000 hotdogs/year
S = $66
H = 45 cents = $0.45
a. The optimal run size
= (✓2DS/✓H)(✓p/✓-✓u)
= (✓2×75000×66/✓0.45)(✓5000/✓4750)
= 4812
b) The number of runs per year
This will be:
= D/Q
= 75000/4812
= 15.59
= 16 runs per year
c) The length (in days) of a run.
This'll be:
= 4812/5000
= 0.96
= 1 day
Karl's Keychain Company produces keychains that sell in its stores for $1 each. On January 1, 2015, the company had inventory of 10,000 keychains. During 2015, the company produced 900,000 keychains. At the end of the business year on December 31, 2015, the company's inventory of keychains was 8,000. What was the value of Karl's inventory investment in 2015
Answer:
$2,000
Explanation:
Calculation to determine the value of Karl's inventory investment in 2015
On January 1, 2015, beginning inventory $10,000
Less December 31, 2015, ending inventory $8,000
2016 value of Karl's inventory investment $2,000
Therefore the value of Karl's inventory investment in 2015 will be $2,000
Q 10.1: Sukui Electronics decided to expand their product line to include GPS trackers. They estimate that over the next 3 years this project will increase their net income by $1.7 million. To do this, they decided not to add a product line of deep sea diving watches. They estimate that over the next 3 years this project would have increased their net income by $800,000. This is an example of
Answer: opportunity cost of capital
Explanation:
The example in the question above is an opportunity cost of capital. Opportunity cost of capital simply refers to the potential loss that an individual makes because of making a choice at the expense of another one.
Here, the opportunity cost of capital is the $800000 that could have been made if they decided to add a product line of deep sea diving watches.
As a CEO, you are concerned that your firm and the industry in your country are being devastated by foreign imports. Trade lawyers suggest that you file an antidumping case against leading foreign rivals and assure you a win. Would you file an antidumping case or not
Answer:
The company can file antidumping case against the leading foreign rivals. The probability of winning the case is only high when there is cash deposits near to zero in the country and balance of payment is negative.
Explanation:
There can be a law suit files against the foreign rivals but the company will have to bear lawyers fee for this. There is a threat to employment of labor in the home country as most of the goods are imported so factories in the home country will be moved towards shut down because consumers will be buying imported goods which are offered at low price.
A plant asset was purchased on January 1 for $140000 with an estimated salvage value of $20000 at the end of its useful life. The current year's Depreciation Expense is $10000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $40000. The remaining useful life of the plant asset is
Answer:
useful life= 12 years
Explanation:
Giving the following information:
Purchase price= $140,000
Salvage value= $20,000
Annual depreciation= $10,000
To calculate the useful life, we need to use the straight-line method formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
10,000= (140,00 - 20,000) / useful life
10,000useful life = 120,000
useful life= 120,000 / 10,000
useful life= 12 years
10. Identical wages
Which of the following is required for all workers to earn identical wages in the long run? Check all that apply.
All workers are protected by a union.
Workers can move from one labor market to another at zero cost.
All workers have equal ability and can be trained to do different types of employment at minimum cost.
All workers must have a bachelor's degree.
Answer:
hi how are you
Explanation:
Bummerland finds itself in a recession caused, as assumed in class, a sticky nominal (money) wage (W) which is too high to clear the labor market.
Bummerland has a Treasury and a "Federal Reserve" (called the Bummerb¬ank). At a meeting of officials of both agen¬cies, various antirecess¬ionary policies are considered. The economic staffs of both agencies are seriously split on issues such as how interest sensitive investment is and how interest sensitive the demand for money is. However, they are in agreement that the marginal propensity to consume (b) is .75 and the marginal propensity to hold cash (k) is .2. Bummerland has banks, but the reserve requirement is 100%, so they don't create money.
Debate has narrowed to four prospective policies. Your as¬signment is: (1) illustrate these policies using IS,LM diagrams; (2) compare as completely as possible ( if you can't, you must explain what additional information would be required ) the effects of these policies on Y*, r, I*, the real wage, and unemployment. Class format is strongly encour¬aged.
Here are the four policies: (1) a $50 billion increase in the money supply by means of open market opera¬tions; (2) a $50 billion increase in the money supply to be introduced by reducing tax collections; (3) a $50 billion increase in the money supply to be introduced through government spending; (4) a $50 billion increase in unemployment benefits paid for with a tax increase.
Answer:
is this a book if so send me a link
Explanation:
People most commonly buy the services of a tattoo artist on the weekends. To encourage people to use their services on weekdays, many tattoo artists adjust prices to influence demand. In other words, they use differing prices to lessen the problems related to the _____ of services.
Answer:
C) perishability
Explanation:
THESE ARE THE OPTIONS FOR THE QUESTION BELOW
A) intangibility
B) inseparability
C) perishability
D) variability
E) responsiveness
From the question we are informed about some People who most commonly buy the services of a tattoo artist on the weekends. To encourage people to use their services on weekdays, many tattoo artists adjust prices to influence demand. In this case, they use differing prices to lessen the problems related to the perishability of services. Perishability of service can be regarded as marketing terms that give description about service that is not capable of been saved, resold or even returned immediately it has been uaed,. Whenever the service is been rendered to a particular customer , it cannot be delivered again to another customer.
The failure rate for each component of a 2-component series system is assumed to be one failure per 1,000 hours of operation, and the switch reliability of replacing a failed component with a spare one is 1.0. Given that there is a spare component, a. Calculate the reliability of the system for a period of 1,000 hours assuming no other failure is possible. b. Determine the approximate MTBF of the system. c. What is the system MTBF without the spare component
Answer:
a. The reliability of the system for a period of 1,000 hours, assuming no other failure is possible is:
= 99.9%.
b. The approximate MTBF (Mean Time Between Failures) without the spare component is:
1,000 hours.
Explanation:
a) Data and Calculations;
Failure rate of each component of a 2-component series system = 1/1,000 = 0.001
Therefore, the reliability rate = 1 - 0.001 = 0.999 = 99.9%
The switch reliability of replacing a failed component with a spare one = 1.0
The system's reliability = Mean Time Between Failure (MTBF) minus the Mean Time to Repair (MTTR)
= 1,000 - 1.0 = 999 hours out of 1,000
b)The equipment's Mean time between failures (MTBF) is the average time it takes the equipment or system to suffer a breakdown. Engineers, vendors, and system analysts use the MTBF metric to measure an equipment's performance, safety, and design reliability.
Black Bear Auto Company incurred $120,000 of indirect advertising costs for its operations. The following 2017 data have been collected for its three departments: New Cars Used Cars Parts and Service Direct advertising costs $30,000 $24,000 $6,000 Newspaper ad space 60% 30% 10% Sales $250,000 $200,000 $50,000 Required: Determine the costs allocated to each department using the following allocation bases: a. Direct advertising costs b. Newspaper ad space c. Sales
Answer:
a. Allocating cost using direct advertising costs
We have:
Cost allocated to New Cars = $60,000
Cost allocated to Used Cars = $48,000
Cost allocated to Parts and Service = $12,000
b. Allocating cost using Newspaper ad space
We have:
Cost allocated to New Cars = $72,000
Cost allocated to Used Cars = $36,000
Cost allocated to Parts and Service = $12,000
c. Allocating cost using Sales
We have:
Cost allocated to New Cars = $60,000
Cost allocated to Used Cars = $48,000
Cost allocated to Parts and Service = $12,000
Explanation:
Given:
New Cars Used Cars Parts and Service
Direct advertising costs $30,000 $24,000 $6,000
Newspaper ad space 60% 30% 10%
Sales $250,000 $200,000 $50,000
The costs allocated to each department can now be calculated as follows:
a. Allocating cost using direct advertising costs
The indirect advertising costs can be allocated using the following formula:
Cost allocated to a department = (Direct advertising costs of the department / Sum of direct advertising costs of the 3 departments) * Indirect advertising costs ................... (1)
Using equation (1), we have:
Cost allocated to New Cars = ($30,000 / ($30,000 + $24,000 +$6,000)) * $120,000 = $60,000
Cost allocated to Used Cars = ($24,000 / ($30,000 + $24,000 +$6,000)) * $120,000 = $48,000
Cost allocated to Parts and Service = ($6,000 / ($30,000 + $24,000 +$6,000)) * $120,000 = $12,000
b. Allocating cost using Newspaper ad space
The indirect advertising costs can be allocated using the following formula:
Cost allocated to a department = Percentage of Newspaper ad space of the department * Indirect advertising costs ................... (2)
Using equation (2), we have:
Cost allocated to New Cars = 60% * $120,000 = $72,000
Cost allocated to Used Cars = 30% * $120,000 = $36,000
Cost allocated to Parts and Service = 10% * $120,000 = $12,000
c. Allocating cost using Sales
The indirect advertising costs can be allocated using the following formula:
Cost allocated to a department = (Sales of the department / Sum of Sales of the 3 departments) * Indirect advertising costs ................... (3)
Using equation (3), we have:
Cost allocated to New Cars = ($250,000 / ($250,000 + $200,000 + $50,000)) * $120,000 = $60,000
Cost allocated to Used Cars = ($200,000 / ($250,000 + $200,000 + $50,000)) * $120,000 * $120,000 = $48,000
Cost allocated to Parts and Service = ($50,000 / ($250,000 + $200,000 + $50,000)) * $120,000 * $120,000 = $12,000
Suppose that Nevada Co., a US-based MNC, makes regular, monthly purchases of materials from a German supplier named Spicurity. These regular payments are typically in the amount of 300,000 euros. Last month the exchange rate was $1.93 per euro. Nevada Co. only has cash reserves in dollars, while Spicurity only has cash reserves in euros. Suppose both companies use the same bank.
In order to conduct this transaction last month, Nevada Co.
Required:
a. $_____ to pay for the materials. Thus, the bank handling the transaction reduced Nevada’s account by this amount, denominated in
b. __________( euros OR dollars). The bank then converted this amount to c. ___________ d. ________________( euros OR dollars). and credited it to Spicurity’s account.
Answer:
In order to conduct this transaction last month, Nevada Co.
Required:
a. $_579,000____ to pay for the materials. Thus, the bank handling the transaction reduced Nevada’s account by this amount, denominated in
b. __dollars___( euros OR dollars). The bank then converted this amount to c. ___euros________ from d. ______dollars_____( euros OR dollars). and credited it to Spicurity’s account.
Explanation:
a) Data and Calculations:
Importer = Nevada Co., a US-based MNC
Exporter = Spicurity, a German supplier
Amount of regular payments = 300,000 euros
Exchange rate = $1.93 per euro
Amount in dollars = $579,000 (300,000 euros * $1.93)
b) To convert to dollars from euro, when the exchange rate is $1.93 per euro, we multiply the euro-based amount by the exchange rate. To convert the dollars to the euro, we divide by the exchange rate. To multiply or divide depends on which currency has a higher value (e.g. euro vs dollars).
A companies gross profit or gross margin was $83,750 and its net sales were $347,800 it’s gross margin ratio is
Answer:
Gross Margin Ratio = 0.240799 or 24.0799%
Explanation:
Gross profit margin ratio or gross margin ratio is a financial ratio that expresses the gross profit of a company as a percentage of its total revenue. The gross profit is the difference between the total revenue and the cost of goods sold. The gross margin ratio can be calculated as follows,
Gross Margin Ratio = Gross Profit / Total Revenue
Gross Margin Ratio = 83750 / 347800
Gross Margin Ratio = 0.240799 or 24.0799%
Stallman Company took a physical inventory on December 31 and determined that goods costing $200,000 were on hand. Not included in the physical count were $25,000 of goods purchased from Pelzer Corporation, FOB, shipping point, and $22,000 of goods sold to Alvarez Company for $30,000, FOB destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end.
What amount should Stallman report as its December 31 inventory?
In its first month of operations, Bethke Company made three purchases of merchandise in the following sequence: (1) 300 units at $6, (2) 400 units at $7, and (3) 200 units at $8. Assuming there are 360 units on hand, compute the cost of the ending inventory under the (a) FIFO method and (b) LIFO method. Bethke uses a periodic inventory system.
A) Cost of the ending inventory LIFO.
B) Cost of the ending inventory.
Answer:
1. $247,00
A. $2,720
B.$2,220
Explanation:
1. Calculation to determine What amount should Stallman report as its December 31 inventory
Using this formula
December 31 Ending inventory = Inventory count as per physical count + Inventory in transit FOB Shipping point + Inventory in transit FOB destination
Let plug in the formula
December 31 Ending inventory= $200,000 + $25,000+ $22,000
December 31 Ending inventory= $247,000
Therefore What amount should Stallman report as its December 31 inventory is $247,000
A) Calculation to determine the Cost of the ending inventory FIFO.
Cost of ending inventory = (200 units * $8) +(360 units- 200 units * $7)
Cost of ending inventory = (200 units * $8) + (160 units * $7)
Cost of ending inventory= $1,600 + $1,120
Cost of ending inventory= $2,720
Therefore The Cost of ending inventory is $2,720
(b) Calculation to determine The cost of ending inventory under the LIFO method
Cost of ending inventory = (300 units * $6) +(360 units -300 units* $ 7)
Cost of ending inventory = (300 units * $6) + (60 units * $ 7)
Cost of ending inventory = $1,800 + $420
Cost of ending inventory = $2,220
Therefore The cost of ending inventory under the LIFO method will be $2,220
8. A relatively small grocery store chain operates 35 stores in three New England states. Recently, the organization has been facing intensified competition from resource-rich dominant players like Kroger and Walmart, new players with innovative services like Amazon, and new low-cost leaders like Aldi. This small chain is seeing declining sales because it cannot offer consumers the same or better products, services, or prices as any of these competitors. Which type of interorganizational relationship does this describe
Answer:
- Population ecology.
Explanation:
'Population ecology' is characterized as the kind of inter-organizational association in which asserts that the dynamic changes takes places in the level of population as an outcome of the selection of their organization and its failure to replace with the evolution/change in the environment. As per Hannan & Freeman's theory of organizational ecology, an organization(like the grocery store in the given situation) faces decline in sales due to their selection of the orgnaization as the structural inertia of the orgnaization does not allow it to adapt the environmental changes and the changes in demands of the population.
SUV Company is considering producing a line of luxury SUVs. Currently, SUV Company sells 4,200 standard SUVs annually for $45,400 each. They expect that they would sell 5,600 luxury SUVs for $80,500. If SUV Company produces the line of luxury SUVs, then they expect to only sell 3,300 standard SUVs. What is the incremental revenue generated from the potential project
Answer:
SUV Company
The incremental revenue generated from the potential project is:
= $409,940,000.
Explanation:
a) Data and Calculations:
Selling price of Standard SUVs = $45,400
Number of Standard SUVs sold annually = 4,200
Luxury SUVs' price per unit = $80,500
Number of Luxury SUVs expected to be sold = 5,600
Reduced number of Standard SUVs sold as a result = 3,300
Lost sales of Standard SUVs = 900 (4,200 - 3,300)
The incremental revenue generated from the potential project is:
Sale revenue from Luxury SUVs = $450,800,000 ($80,500 * 5,600)
Lost revenue from lost sale of
Standard SUVs = 40,860,000 ($45,400 * 900)
Incremental revenue generated = $409,940,000
b) The incremental revenue is the additional revenue generated from the introduction of the Luxury SUVs, excluding the lost revenue from the non-sale of Standard SUVs as a result of the introduction.
Which best explains why banks consider interest on loans to be important?
Answer:
what are the options as answers?
Explanation:
There are some excellent free personal finance apps available: Mint, GoodBudget, Mvelopes, BillGuard, PocketExpense, HomeBudget, and Expensify. After using Mint, you realize you need to pay off one of your high interest loans to reduce your interest expense. You decide to discount a $5,250, 345-day note at 3% to your bank at a discount rate of 4.5% on day 210. What are your proceeds
Answer: $5309.86
Explanation:
The proceeds will be calculated as:
Face value of note = $5250
Interest rate = 3%
Note tenure = 345
Number of days used = 360
Outstanding interest on note = $5250 × 3% × 345/360 = $150.94
Gross Proceeds = $5250 + $150.94 = $5400.94
Bank Discount rate = 4.5%
Discounting days = 210
Time if maturity left = 345 - 210 = 135
Discount rate for 135 days = 4.5%/360 × 135 = 1.69%
Discount value = $5400 × 1.69% = $91.14
Net proceeds after discount = $5400 - $91.14 = $5309.86
Which statement concerning the kinked demand curve model of oligopoly is false? The portion of the demand curve above the "kink" is more elastic than the portion below. The firm's marginal costs can sometimes shift without changing the profit-maximizing price and output. It assumes when one oligopolist raises the price, all others will follow. It addresses the question of price "stickiness."
Answer: It assumes when one oligopolist raises the price, all others will follow
Explanation:
An oligopoly is a form of market where there are dominated by few group of large sellers.
A kinked demand curve simply happens when the elasticity is not thesame for the lower and higher prices and the demand curve isn't a straight line.
It simply suggests that there are rigid prices and assumes when one oligopolist raises the price, all others will follow.
You are a seller of farm equipment. Sidney Lanier puts in an order for a new combine harvester, which costs $425,000. Under the terms of the agreement, Mr. Lanier has to forward you a certified check for 25% of the purchase price within 15 days of the signing of the purchase agreement. Meanwhile you are preparing the combine harvester for shipment to Sidney Lanier's farm.
On the 15th day, you do not receive a check from Mr. Lanier. You do not receive a check on the 16th, 17th, or 18th day either. Meanwhile, another farmer has come into your office to ask about buying the combine harvester.
What can you do in this situation?
A. Since you and Mr. Lanier have a contract, you have to wait until he sends you the check before you can do anything.
B. Mr. Lanier had a duty to send you a check by the 15th. He's breached that duty under the contract, and it appears to be a material breach, so you have the right to rescind the contract.
Answer: B. Mr. Lanier had a duty to send you a check by the 15th. He's breached that duty under the contract, and it appears to be a material breach, so you have the right to rescind the contract.
Explanation:
Material breach occurs when a particular party fails to fulfill his or her part in a contract and this can lead to the other party rescinding the contract or sue for a breach of contract.
Since under the terms of the agreement, Mr. Lanier has to forward a certified check for 25% of the purchase price within 15 days of the signing of the purchase agreement but he didn't send the check, this means that the there's a breach in the contract, and the contract can be rescinded.
Use the following information of VPI Co. to prepare a statement of cash flows for the year ended December 31 using the indirect method.
Cash balance at prior year-end $43,600 Gain on sale of machinery $2,900
Increase in inventory 8,600 Cash received from sale of
machinery 11,300
Depreciation expense 7,600 Increase in accounts payable 3,300
Cash received from issuing stock 11,600 Net income 59,000
Cash paid for dividends 4,600 Decrease in accounts
receivable 6,600
Answer:
VPI Co.
Cashflow statement for the year ended December 31
$
Operating activities
Net income 59,000
Add Depreciation 7600
Less gain from sale of machinery (2900)
Increase in Inventory (8,600)
Increase in accounts payable 3,300
Decrease in accounts receivable 6,600
Cash flow from Operating activities 65,000
Investing activities
Cash received from sale of machinery 11,300
Financing activities
Cash paid for dividends (4,600)
Net cashflow 71,700
Cash balance at prior year-end 43,600
Cash balance at current year-end 114,300
Explanation:
The indirect method of cashflow statements starts with the cashflows from the operating activities to Financing and then investing activities.
An increase in an asset other than cash is a decrease in cash and vice versa. An increase in a liability is an increase in cash and vice versa. We add or subtract none cash items like depreciation, gain on asset disposal etc.
Cala Manufacturing purchases land for $281,000 as part of its plans to build a new plant. The company pays $35,400 to tear down an old building on the lot and $52,330 to fill and level the lot. It also pays construction costs $1,320,800 for the new building and $83,373 for lighting and paving a parking area. Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash.
You decide to buy a 60 unit apartment complex in Austin for $15,000,000. You have $6,000,000 to use as a down payment and have applied for a $9,000,000 mortgage loan from Bank of the Ozarks. The loan will have a 25 year term, be fully amortizing, and have fixed interest rate of 6.24% per annum. What is your monthly payment on the loan?
a. $54,731.69
b. $59,314.62
c. $65,731.09
d. $98,857.71
Answer:
Monthly payment= $59,314.62
Explanation:
Giving the following information:
Loan= $9,000,000
Number of periods (n)= 25*12= 300 months
Interest rate= 0.0624/12= 0.0052
To calculate the monthly payment, we need to use the following formula:
Monthly payment= (PV*i) / [1 - (1+i)^(-n)]
Monthly payment= (9,000,000*0.0052) / [1 - (1.0052^-300)]
Monthly payment= $59,314.62
Bonita Industries uses the periodic inventory system. For the current month, the beginning inventory consisted of 481 units that cost $60 each. During the month, the company made two purchases: 719 units at $63 each and 361 units at $65 each. Bonita Industries also sold 1203 units during the month. Using the average cost method, what is the amount of ending inventory
Answer:
$22,389
Explanation:
The computation of the ending inventory is shown below:
But before that the average cost per unit and the ending units should be determined
The average cost per unit is
= (481 units × $60 + 719 units × $63 + 361 units × $65) ÷ (481 units + 719 units + 361 units)
= ($28,860 + $45,297 + $23,465) ÷ (1,561 units)
= $62.54
Now the ending inventory units is
= 1,561 units - 1,203 units
= 358 units
Now finally the ending inventory is
= 358 units × $62.54
= $22,389
If a French bank opens a new branch office in California, where does this transaction appear in the balance of payments accounts
Answer:
Either U.S or france
Minns Co. purchased a put option on Justin common shares on July 7, 2017, for $400. The put option is for 400 shares, and the strike price is $70. (The market price of a share of Justin stock on that date is $70.) The option expires on January 31, 2018. The following data are available with respect to the put option:
Date Market Price of Minns Shares Time Value of Put Option
September 30, 2017 $77 per share $250
December 31, 2017 $75 per share $75
January 31, 2018 $78 per share $0
Required:
Prepare the journal entries for Minns Co. for the following dates.
a. July 7, 2017—Investment in put option on Justin shares.
b. September 30, 2017—Minns prepares financial statements.
c. December 31, 2017—Minns prepares financial statements.
d. January 31, 2018—Put option expires.
Answer:
a. 7-Jul-17
Dr Put Option $400
Cr Cash $400
b. September 30, 2017
Dr Unrealized Holding gain or loss on income $150
Cr Put option $150
c. December 31, 2017
Dr Unrealized Holding gain or loss on income $175
Cr Put option $175
d. January 31, 2018
Dr Loss on settlement of put option $75
Cr Put option $75
Explanation:
Preparation of the journal entries for Minns Co. for the following dates.
a. Preparation of July 7, 2017 journal entry to record Investment in put option on Justin shares
7-Jul-17
Dr Put Option $400
Cr Cash $400
(Being to record Investment in put option)
b. Preparation of September 30, 2017 journal entry to record Minns preparation of financial statements.
September 30, 2017
Dr Unrealized Holding gain or loss on income $150
($400-$250)
Cr Put option $150
(Being to record Unrealized Holding gain or loss on income )
c. Preparation of December 31, 2017 journal entry to record Minns Preparation of financial statements
December 31, 2017
Dr Unrealized Holding gain or loss on income $175
($250-$75)
Cr Put option $175
(Being to record Unrealized Holding gain or loss on income )
d. Preparation of the journal entry to record January 31, 2018 Put option expires
January 31, 2018
Dr Loss on settlement of put option $75
Cr Put option $75
($75-$0)
(Being to record loss on settlement of put option)
The following information is available for Quality Book Sales's sales on account and accounts receivable:
Accounts Receivable Balance, January 1, Year 2 $78,500
Allowance for Doubtful Accounts, January 1, Year 2 4,710
Sales on Account, Year 2 550,000
Collections of Accounts Receivable, Year 2 556,000
After several collection attempts, Quality Book Sales wrote off $2,850 of accounts that could not be collected. Quality Book Sales estimates that 0.5% of sales on account will be uncollectible. Required:
(A) Compute the following amounts:
(1) Using the allowance method, the amount of uncollectible accounts expense for Year 2.
(2) Net realizable value of receivables at the end of Year 2.
(B) Explain why the uncollectible accounts expense amount is different from the amount that was written off as uncollectible.
(1) Uncollectible accounts expense is an estimate of current receivables that may eventually be uncollectible.
(2) Uncollectible accounts expense is the actual amount that was determined in the current accounting period to be uncollectible.
Answer:
Quality Book Sales
1) Uncollectible accounts expense for Year 2 = $890
2) Net realizable value of receivables at the end of Year 2 = $69,650
B) The reason why the uncollectible accounts expense amount is different from the amount that was written off as uncollectible is:
(2) Uncollectible accounts expense is the actual amount that was determined in the current accounting period to be uncollectible.
Explanation:
a) Data and Calculations:
Accounts Receivable Balance, January 1, Year 2 = $78,500
Allowance for Doubtful Accounts, January 1, Year 2 = 4,710
Sales on Account, Year 2 = 550,000
Collections of Accounts Receivable, Year 2 = 556,000
Uncollectibles written off = $2,850
Allowance for Uncollectible accounts = 0.5% of Sales ($550,000 * 0.5%)
= $2,750
1) Uncollectible accounts expense for Year 2 = $890 ($2,850 + $2,750 - $4,710)
2) Net realizable value of receivables at the end of Year 2 = $69,650
B) The reason why the uncollectible accounts expense amount is different from the amount that was written off as uncollectible is:
(2) Uncollectible accounts expense is the actual amount that was determined in the current accounting period to be uncollectible.
Accounts Receivable Account
Account Titles Debit Credit
Beginning balance $78,500
Sales 550,000
Cash $556,000
Allowance for Uncollectibles 2,850
Ending balance 69,650
Allowance for Uncollectible Accounts
Account Titles Debit Credit
Beginning balance $4,710
Accounts receivable $2,850
Uncollectible Accounts Expense 890
Ending balance 2,750
The fractional reserve system of banking started when goldsmiths began: Select one: a. Accepting deposits of gold for safe storage b. Charging people who deposited their gold c. Using deposited gold to produce products for sale to others d. Issuing paper receipts in excess of the amount of gold held
Answer:
d. Issuing paper receipts in excess of the amount of gold held.
Explanation:
Fractional-reserve banking is practiced by all commercial banks. Such banks involve banks that accept deposits from various customers and make loans to other borrowers while keeping an amount in reserve that is equal to a part of the deposit liabilities of the bank.
The fractional reserve system of banking started when goldsmiths began issuing paper receipts in excess of the amount of gold held.
Option d. is correct.